Remarks by Anwar Ibrahim at the opening of the Forum on Economic Management during Political Transition on March 12, 2013, Kuala Lumpur

The present UMNO-BN government of Dato' Seri Najib Razak is living on borrowed time. It doesn't want to admit it but its legitimacy is now totally in question because constitutionally, its full term has expired.

How long more do the people have to bear the 'whips and scorns' of this outrageous fortune? Indeed, the people's patience is tested to the limit here by the audacity of a government that goes on ruling without a mandate.

A number of bogus analysts and self-appointed doomsday prophets, especially those driven by very personal agendas, have warned that Malaysia will descend into political and economic chaos in the event of a Pakatan Rakyat victory.

On the other hand, the more genuine and independent observers have expressed greater optimism. For instance, the original 'Dr Doom', Prof. Roubini says that our economy will stay robust even with a change in government.

We know that a mandate for change is not limited to the political sphere though it is true that without that mandate, economic management itself will be off to a false start.

When Indonesia made that break from military autocracy to constitutional democracy, much of the focus of the free world was on how its economy would weather the transition. And in their case, transition would stretch for years and indeed the fruits of that initial process of political upheaval are for all to see.

In the case of the Arab Spring, the major worry remains the lack of clearly defined policies that would set the road map to economic recovery and growth. They are still finding their way and it won't be an easy way but that is no excuse for rejecting freedom and democracy. Certainly, political stability is a key factor, and I might just emphasise the most crucial factor in setting the direction and objectives of economic management. But let me stress that this is not to be confused with the argument that, because political stability is so crucial, therefore there should be no change in government. This is false logic because the test of political stability is in fact the ability of a nation to experience a change of government peacefully through the ballot box. In this regard, no matter what the UMNO-BN propaganda says, we, the Pakatan Rakyat believe in this peaceful process and we are confident that the people are matured and ready for this change. Now, the question that needs to be answered first is what are the likely economic consequences of a peaceful political transition? I think the obvious response is that number one, the status quo may be maintained i.e. nothing exciting, the same policies are intact and no one wants to rock the boat. The economy may worsen or remain stagnant, or it may improve marginally but lacking in lustre. Or number two, things could head south i.e. go downhill. The new government has no clue how to run the economy and throws caution to the wind. They try to outdo the previous government's fiscal irresponsibility and take the country down to even greater depths of deficit.

Or finally, a third scenario is possible: the new government seizes the day and carries out the economic policies and reforms it has laid out in its election manifesto. If things are done properly and with full commitment to achieve broad-based and sustainable growth, we may well see economic transformation. This is the road we will take.

In other words, a mere change of government will not lead to chaos in the economy. Certain conditions precedent must be met of course. There must be due democratic process and, to my mind, this is best translated as good governance and the rule of law.

No doubt the question of policy clarity takes precedence. Economic management must be based on sound policies – not knee jerk reactions. There must also be continuity but this is subject to a major caveat: only bona fide, above board undertakings, ventures and enterprises will be continued. Rent seeking and other crony driven schemes will meet their Maker sooner than later.

We know that the Najib administration has been taking our economy down the deficit path. And now, as the elections draw nearer, with the kind of money that would have been doled out we would inherit an economy which would be in even greater deficit.

So, efforts must be geared towards arresting this trend with the longer term objective of finally turning it around.

There will be no continuity of the UMNO-BN model which has prevented Malaysia from attaining to higher-income status. What we have lost over the years in terms of "strategic advantage" we must strive to gain back. We are a nation blessed with resourceful people. We must not allow this to drain away.

In this process, it is of the greatest importance that there is good governance. We can talk till the cows come home (no pun intended) or till our faces turn dark blue (again no pun intended) or pay millions to consultants to come up with dazzling charts and models about transformation but, without good governance, that will just be public relations and empty rhetoric. Failure in governance would include corruption in high office, lack of transparency in government dealings, and breakdown of accountability. There must be meaningful structural reforms that will change the dynamics of how we want the nation's economic pie to expand.

Investments in new sectors must be encouraged but allowing this to be monopolised by the elite few is a definite 'no'. In other words, we will encourage fair competition and the spreading of the economic pie. We have nothing against big corporations but the priority is job creation and how these corporations fare in the overall scheme of social justice which indeed will be inseparable from the principles of economic management.

Another crucial area of concern is the balance between state-dominated ventures and private investment. We have enough examples of private ventures particularly those in providing basic utilities which act more like oppressors of the people. Because they are protected by Putra Jaya they are not responsive to the people's call for better service, let alone for more reasonable rates.

In the international arena, our competitiveness must surely be another key area of focus for economic management not just in the transition period but for long-term sustainable growth.

The list is indeed long as to what we can do and what we must do at this crucial stage of our nation's destiny.

Suffice it to say that in these deliberations, we are not just looking at pie charts, numbers and data, important as they are, but at the fundamental issues of governance. In all these, we must remain steadfast in being guided by the safeguards and best practices of a vibrant constitutional democracy.

Economic management is not a game of one-upmanship but a duty of the highest calling to be discharged by those of the highest integrity for the well-being of the nation and the welfare of the people. Thank you.